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How to become a financial adviser: diplomas, degrees and workplaces

how to become a financial adviserInformation on how to become a financial adviser is sparse. Money Marketing speaks to advisers about what the requirements really are and how best to meet them.

Speaking to financial advisers and planners today, each will have a unique and varied story about how they entered the profession. There are more than a handful of pathways in, with a push towards education ramping up significantly over the past decade to coax in new talent.

Experts say information on how to break into the profession continues to be sparse however, likely down to the lack of prescription over the required training and, to a certain extent, qualifications. As a result, prospective entrants into advice continue to be unsure on requirements for entry.

Last month, Money Marketing looked into the academy training programmes at major networks including St James’s Place, Quilter, Ascot Lloyd, Prudential and Openwork. Each has a different recruitment and training model, but all are open to receiving candidates from a multitude of professional and educational backgrounds and willing to offer bespoke training.

For independent financial advisers (IFAs) however, stumping up the costs to hire a new recruit into the profession and support them through the various examination stages can be daunting. With an increase in career changers looking for new options, Money Marketing spoke with a variety of advisers about what the requirements really are and how best to meet them.

What qualifications are most useful for financial advisers?
The Level 4 Diploma of Financial Planning remains the benchmark qualification for the industry, but there are a number of other standards that advisers can take.

The FCA does not give any direction on what pre-qualifications or providers are most suitable, while individual firms hold the responsibility to ensure employees are advising within the appropriate regulatory frameworks relevant to their qualifications.

About 60 organisations are on the FCA’s current register of recognised education providers for financial planning and wealth management qualifications, the largest of which are the Chartered Insurance Institute, the Chartered Institute for Securities and Investments, and the London Institute of Banking and Finance.

At the CISI, the Diploma is open to those with a statement of professional standing and who have completed an RDR-compliant pre-qualification. The CISI also offers the Level 4 Investment Advice Diploma and the Level 7 Chartered Wealth Manager qualification.

At the CII, Level 3 qualifications available are the Certificate in Financial Services and the Certificate in Regulated Financial Services Operations. It used to offer the Certificate in Financial Planning, and one is required before sitting the Diploma.

New Model Business Academy managing director Tom Hegarty says Level 4 is challenging but doable for career changers.

He says: “The coursework is very modular and very suited to individuals entering the profession for the first time. A few years ago it was easier to pass and get qualified, but the Level 4 exams are hard.

“It is most helpful when an employer can give new advisers some support and a track to run on.”

Choosing a workplace
Prospective advisers in small firms often begin from an administration or paraplanning position and are usually able to take advantage of subsidy for exams, and promise of continuing employment.

Hegarty says: “Apprenticeship programmes have really opened up a lot of options and provide much more structured support programmes for getting qualifications completed.”

The pathway to a major network is easier given their wide recruitment drives and basic education level requirements, but prospective advisers should also consider the drawbacks of using a restricted model.

Hegarty says: “With a firm like SJP for example, you are then tied down to working for them in a restricted capacity.”

SJP advisers wishing to leave the firm, often to establish themselves as an IFA, face restrictive covenants of up to 10 years, according to advisers who have left, and the loss of their client bank.

Yellowtail Financial Planning director Dennis Hall says smaller firms do not have the support capacity of networks, and that each firm then has its own qualification expectations.

Hall says: “We mostly tend to look for people to recruit that are already qualified to at least a Diploma level, and who are then committed to working towards being chartered.”

Financial planning degrees
The University of Northampton, University of South Wales and Manchester Metropolitan University are the only three in the UK currently offering specific financial planning degrees.

Northampton offers a Bachelor of Science in Banking and Financial Planning, through which students are given the option to gain chartered status through the CII. A University spokesman tells Money Marketing that there are 53 students enrolled in the 2017/18 academic year.

Year one of the degree is predominantly banking and industry-based, with papers in investment, pensions, retirement planning, personal tax, financial services law and financial intermediation introduced in year two. Third-year work expects students to write and practise case studies. Graduates are directly issued with an FCA license to practise.

Manchester Metropolitan University’s Masters Degree in Financial Planning and Business Management requires students to already be chartered and have gained Fellowship of the Personal Finance Society or an equivalent. Candidates must also hold four years of experience and show proof of continuing professional development activities.

The University of Coventry also runs a Bachelor of Financial Services degree through which graduates receive dispensation from certain CII exams. A spokesman says: “Graduates are eligible for recognition of prior learning towards CII qualifications and can apply for credits for financial planning qualifications then qualify more quickly.”

The London Institute of Banking and Finance provides its own Bachelor of Science split into banking and finance, or finance, investment and risk streams.

Hegarty says second jobbers need to consider whether they are more suited to learning on the job, or need the academic experience of time at university.

Exeter-based Yellowtail is an example of a firm where it can be difficult to attract talent due to location and Hall says prospective advisers should look outside the major cities.

Yellowtail has recently launched a summer programme for university students looking to enter the firm as advisers. He says: “We have an intern programme we started this year and we have specific projects we give them to do over a period of two months. Finding strong candidates can take a long time, which is why we recently opened this option.”

Advisers tell Money Marketing that the lack of clear information about entering the industry is compounded by the strength of marketing campaigns from major banks and accountants targeting graduates.

Hegarty says: “A careers fair will be full of banks and accountancy firms – perhaps EY or Deloitte – and they are really out there promoting graduate programmes. No one goes to these career fairs where future advisers could be promoting financial advice to graduates. You really have to take things upon yourself in the industry. No one is flying the flag for an advice profession.”

Read how six financial advisers made their way into the profession. 

Expert view: James Walker, director, recruitment consultancy BWD

Financial advisers have set the bar high on qualifications

There is an increase in trainee positions, which is motivating IFA firms of all sizes expanding their horizons to hire potential employees from outside the industry. The most popular examination path is the CII, but others are gaining traction. Certified and chartered is starting to become the industry standard, which is great for those who have access to an adviser. The increase in costs for firms for advisers to reach this status is considerable and is the only negative.

IFA firms of all sizes are being motivated to hire from outside the industry

Further encouragement for people looking to change their career path was the announcement by one of the largest insurers, which will see them take non-industry people and put them through an 18-month training programme to achieve a minimum Level 4 status. Other insurers are keeping a close eye on this, as they look to follow suit. Again, this is at a significant cost, so due diligence must have been conducted to ensure this move is viable.

If successful, it could be the boost the sector, which needs to start filling the vast gap of qualified individuals required in the UK.



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There are 2 comments at the moment, we would love to hear your opinion too.

  1. I wonder if business ethics and integrity will be on the curriculum.

    The industry certainly needs it. I have been battling for several years against a well known firm who employed an adviser , a director no less, who gouged more than half a million out of my fund. The firm, based in the north of Engand, does not deny the fraud but is hiding behind legal technicalities about time limits and using attack dog solicitors to fight me.

    The adviser involved is now in jail serving a sentence for another fraud but that is irrelevant to my case, apparently.

    As I say, business ethics and integrity should have a place. My mistake was to assume that they already did.

    • The CII R01 exam is mandatory when you are training up to level 4 Diploma and covers Financial Services, Regulation & Ethics. I am sure the other boards will also require an equivalent exam pass.

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